Who Loses and Who Wins in a Housing Crisis? Lessons From Spain and Greece for a Nuanced Understanding of Dispossession

Abstract

The emerging postcrisis geographies in Southern Europe are intrinsically related to debt and dispossession. In Spain, mortgage homeownership and indebtedness led to housing dispossessions, while in Greece, skyrocketing private indebtedness is eventually arranged through housing foreclosures. Building upon the notion of accumulation by dispossession, i.e., on the way capital accumulates wealth in the era of neoliberal globalization, this article elaborates two novel concepts to understand the housing crises in both countries. The perception of dispossession by odious taxation describes the process of wealth extraction facilitated by financial mechanisms in Greece, and dispossession by political fraud is conceived as a characterization of fraudulent political arrangements and financial tools used for orchestrating housing stealth in Spain. This nurtures the perception that a comparative insight on the processes of dispossession in the Spanish and Greek housing markets may facilitate a nuanced understanding over the interrelated processes of contemporary housing restructuring.

Keywords:

• Housing
• crisis
• accumulation by dispossession
• financialization
• European Union
• Spain
• Greece

Notes

1. In this article, the term commons refers to the noncommodified social and spatial relations in our livelihoods, as means for fulfilling peoples’ needs. This includes a wide panorama, ranging from social housing and other welfare residuals eventually organized by the state, over different forms of public space to assemblies and autonomous spaces that create alternative social relations.

2. REIT are investment vehicles for real estate, allowing both small and large investors to acquire real estate equity, as well as mortgages. REIT usually target specific markets; they are listed on stock exchanges and have higher volatility than traditional real estate investments funds do. REIT often enjoy tax exemptions and other advantages, following the legislation of each country.

3. Collateral debt obligations are a type of structured credit product, encouraging cash flows from mortgages and other debt that make the cost of lending cheaper for the aggregate economy.

4. Securitization is the process through which a corporation, a fund, or the government creates a financial product by combining different financial assets, which are then sold as repackaged products to investors.

5. SAREB corresponds to the Spanish abbreviation for Sociedad de Gestión de Activos procedentes de la Reestructuración Bancaria, which is the technical name for the asset management company.

6. This is an abbreviation of the Spanish name Fondo de Activos Bancarios.

7. In Spanish: “No hay pan para tanto chorizo,” which consists of a pun using the term “chorizo” that besides being a spicy sausage also denotes a fraudulent or corrupt person.